Executive SummaryQuality and efficiency is the key to American Connector Company (ACC) success. ACC has lost market share to DJC over the recent years, which will be exacerbated if DJC opens a production facility in the United States. DJC has gained much knowledge from its Kawasaki plant and is going to enter the US market with factories that will be efficient. ACC is in trouble and needs to drastically change the way they do business if they want to survive.
Looking and emulating DJC is the first step American Connector needs to follow. American Connector can regain market share and survive by focusing on quality and efficiency. ACC needs to do the following to ensure success before DJC enters the US market:1)Redesigning their factory layout for a more streamlined operation.
2)Purchase new equipment that is in better shape and more efficient. Institute a good maintenance program to ensure the equipment runs properly.
3)Work with the consumer to create a good simplistic design.
4)Continue to keep employees happy to make sure they remain at the company and ACC retains this intellectual property.
5)Implement a Quality Control Division. ACC cannot rely on identifying defective parts only after production. They need to implement quality control throughout the process, which will reduce costs and increase efficiency and profitability.
Industry BackgroundJapan and the United States have had a different mentality and work ethic over the past centuries but it has become especially apparent over the last 30 years. The United States relies on money, technological sophistication and reputation/name recognition. Japan has been able to get ahead with hard work, innovations, and technological advances. To the dislike of many American companies, Japan has taken technologies created by US companies and reverse engineered and improved on them until they were the dominant company in the industry. A good example is shown with the DJC Corporation in Japan. They took ideas, concepts and technology from American companies and made them even more efficient and successful.
The electrical connector industry is large. These connectors do everything from attach wires to wires, wires to outlets, attach wires, components or chips to PC boards, or attach PC boards to other boards. These connectors have two main parts: a plastic housing and metal socket pins or terminals. The applications range from military and aerospace to computers to telecommunications to automobiles. There are thousands of standard connector product lines. The pricing of the connector depends on its level of technology and industry use.
In the 1970's there was a large boom in the United States and companies took advantage of it. Demand slowed in the 1980's leading to many suppliers for a reduced need leading to consumers being able to demand their prices.
The miniaturization of circuitry and technological advances led to the need for new connectors and manufacturing techniques. The demands of the consumer were highly specific. This allowed other competitors to enter the US market.
Lessons LearnedA. DJC at the Kawasaki Plant1) Efficiency - DJC continued to review and adjust their production facilities to find the most efficient way to operate. This focus on efficiency has created a cost efficient way of producing wire connectors that cannot be rivaled. It will take other companies years to match the efficiency of the Japanese production facilities.
The Just-In-Time delivery of resources and demand on their raw material suppliers to have almost daily deliveries of supplies, DJC reduced the need for large warehouses saving money. The use of tape rolls of connectors was a design that the consumer liked and found easy for use at their production facilities. The design of their product packaging led to a more efficient way to palletize and containerize their products for shipment to distributors. While DJC maintains about two months of finished goods, the...
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